Benefits of SWIFT gpi (Global Payments Innovation)
SWIFT, known as the payment messaging network that provides secure and easier transactions internationally in between over 10.000 financial institutions, has developed a new initiative called SWIFT gpi (Global Payments Innovation) and it aims to enhance the payment procedures via SWIFT both for the customers and institutions. The biggest problems of international payments are related to pace, cost and traceability because the previous network faced several issues like the lack of visibility over the funds after they are sent, intermediary institutions charging routing fees and delayed payments.
The SWIFT gpi was launched in 2017 with an improved system that promises to meet the expectations for a better speed, price, and transparency for cross-border payments. So, by embracing this new and improved standard in global payments, it is possible for financial institutions to send and receive money faster, more securely and with full transparency. SWIFT gpi also improves the global payments among banks and other corporate networks to whom the speed and smoothness are crucial for the business.
Benefits of SWIFT gpi
The key benefits of SWIFT gpi can be classified into 5 points which actually focus on the mostly asked questions of the customers.
With SWIFT gpi, the payments are carried out on the same day the payment process is initiated (depending on operating hours), most of the time it takes minutes or seconds. Nearly half of gpi payments are completed within 30 minutes, 40% in under 5 minutes, and almost all gpi payments are credited within 24 hours. This automatically strengthens the commercial relationships by improving global trade and helps banks to achieve higher standards. Corporates can benefit from more predictable cost allocation and easier cash flow management. Speed is definitely one of the strongest features of gpi.
Thanks to the UETR (Unique End-to-End Transaction Reference) which enables customers to check the location of the funds in real-time, a unique reference gets associated with each payment process and this information is shared with all the banks that are involved in the transaction. The beneficiary receiving the payment in his/her account signals the finalization of this process. With the possibility to trace the payments end-to-end and in real-time, the cross-border payments have become fully visible and in case of a problem or a question, banks can understand and solve the issues in a more quicker and effective way.
In the previous network, it was not possible to know the cost to make the payment which was a big problem in terms of transparency. Now, the banks who are involved in the network of SWIFT gpi, are able to provide its customers full visibility of the breakdown of all the costs including processing fees and exchange rate costs. They can also inform them about the timing of the transaction. This new improvement helps both banks and customers in a way that banks can improve their services and routing while customers are given the opportunity to make better decisions on their financial management.
The transparency on the fees and timing is also important for the businesses that rely on cross-border payments. When the information on the costs is invisible, it creates uncertainty both in terms of making payments and time.
SWIFT gpi’s another benefit is to maintain consistent data records. The identification of the payment is guaranteed by the commitment established among the banks taking part in SWIFT gpi. The original data and information about the payment go unchanged throughout the whole process which in turn facilitates the reconciliation of the payments by the recipients. This data integrity is becoming more and more important at the age of globalization and digitalization because without the consistency, keeping track of the payments or reconciling the invoices, and finally, many settlement processes would be delayed.
The challenges of doing international payments are many including different rules and procedures of national banks, restrictions on the import and export processes, foreign exchange controls, and the last but not the least regulations which are becoming harder to comply with thanks to the challenging demands of digitalization. SWIFT gpi offers a secure and compliant system in the rapidly changing world of digital threats and regulatory obligations while at the same time it ensures a fast and transparent payment experience.
- Unaltered Remittance Information
SWIFT gpi protects you from loss of information by third parties. With unaltered remittance information, ensure remittance data is unchanged when payment arrives.
SWIFT gpi aims to form a frictionless cross-border transaction system via a new set of business rules and digital tools which can provide the banks with an opportunity to create a better user experience. Gpi creates solutions for both corporates and individuals by focusing on different client problems at the same time.
As the world becomes more and more connected, it has become normal to buy goods and services across borders. So, for businesses performing internationally, it is crucial that global trade activities are as easy and frictionless as possible. In this environment, they expect their banks to provide payment experience that is safer, faster, more transparent and accurate. SWIFT gpi offers the network for the banks and the financial institutions to provide this service.
SWIFT is known as the highly trusted system among the financial institutions around the world. Over 56% of all international payments on SWIFT are now sent via SWIFT gpi, representing more than $300 billion in daily value. So, it seems that SWIFT gpi will continue to grow and evolve so that SWIFT is planning to develop gpi by adding the abilities like pre-validation of payment instructions to correct the errors before confirmation while at the same time new markets are to be added into SWIFT gpi network like Asia Pacific.
Paygate Maestro gpi by Fineksus
Fineksus provides a unique solution for SWIFT gpi challenges. The Paygate Maestro gpi acts as a bridge between the bank’s core banking system and the SWIFT’s gpi Tracker. It updates the status of gpi enabled payment messages by getting updates instantly from the tracker. Paygate Maestro gpi also provides a rich dashboard screen. Via this dashboard, which is similar to the SWIFT gpi dashboard, users can track payment duration, status, deduction information.
Paygate Maestro gpi can also export tracking information to other systems in real-time via web services, such as internet banking and mobile banking.
This helps to feed instant payment status information for the bank’s customers. In addition to these functions, automated workflows can be created on the application like; gpi cut of date reminders, e-mail notifications, batch updates to tracker.
Do you need more information about SWIFT gpi? You can contact us. We would be delighted to share our expertise and answer any of your further concerns.
Gökçe Gence, Head of Solution & Project
Serkan Arslan, CAMS, Head of Sales, MENA